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Thursday, 15 November 2012

Selling New Selling Less Cadbury’s ‘Krafty’ Business

Price and appearance are key parts of your brand image.
Tinker around with them at your peril.

I had a surprising experience recently when I grabbed a
couple of bars of Cadbury Dairy Milk for my basket at a TESCO express.

At first sight I thought I had bought two similar handy
sized bars of Cadbury chocolate. The till receipt priced them as 2 @ 59 pence
each. On closer inspection, I noticed one bar was a ‘new tablet shaped’
product.

At even closer inspection I discovered the new product had 4
g less chocolate than the old style bar.

Beforehand, 1 p would
have bought me 1.204 g now it only bought0.763g ! Feels a bit of a ‘swiz’
to me ( disappointment L)

Perhaps not that significant difference but for Cadbury they
were getting an extra 5p a bar, a £1 for every 20 bars.

The Chocolate Bar sector is a relatively static and
inelastic market.

Cadbury’s49g bar is
priced at 59 pence. Perhaps like the Mars bar there is even a Cadbury’s Dairy
Milk economic Index.

The product is a nice handy sized treat .

But what is the manufacturer to do if the raw material price
of cocoa goes up?

Cadbury ( Kraft) are in business to make a profit.

The conventional options include:-

1.Absorb the price increase and take less profit

2.Reduce the size of the bar and keep the
unit price the same

3.Increase the price of the bar

But Cadbury got creative and changed the shape the tablet .

Rivals, Galaxy had changed their tablet to a smoother
rounder shape and had come to no harm after all!

Make it into a new
shape and hope the customer does not notice or care that you have not only
changed their bar’s shape but sold them less chocolate for their money.

None of this is new in the Confectionary world. –BACK IN THE DAY… 1980s

The story went round how rivals Rowntree introduced the Yorkie Bar into what seemed
Cadbury’s impenetrablestronghold of the
chocolate bar sector in the UK.

Cadbury’s Dairy milk
chocolate bar had dominated the UK market for years .

Cocoa prices at that time increased and Cadbury had to
decide what to do.

Cadbury chose to keep the unit sales price the same
but make the bars a litte thinner.

Meanwhile J Walter
Thomson were commissioned by rivals
Rowntree to help in develop a product to compete with Cadbury in the block
market.

Through market research involving focus group discussions
JWT discovered that some customers of
Cadbury Dairy Milk although enjoying the taste of the revised bars, had become
dissatisfied by the bar being less thick and chunk when bitten into causing it
to snap. In a sense customers felt the product had changed and was less
satisfying.

They also discovered through research on brand image that
Cadbury was seen as a ’ nurturing ‘female’and ‘ mum’s treat’ type brand.

Then came the challenge to Rowntree of how to create a
product to challenge Cadbury’s dominance. A number of names were tried out
‘Trek’ was tried out but failed to appeal to pilot groups. The image proposed
was to make the Rowntree bar more masculine .Yorkie bar was launched with its
famous adverts of the young rugged truck driver. This was well before the
present era of Eddie Stobart knights of the road personalities.

Yorkie was a tremendous success.

Cadbury’s retaliation was the Wispa bar to attack the flagship Aero
product of Rowntree. After a while Wispa was dropped by Cadbury; only to be
revived due to a facebook campaign by
consumers.

Both Cadbury and Galaxy now have Bubbly and X respectively to
compete with Aero.

What comes around goes around.

I guess Cadbury now mine the internet for Facebook and Twitter trafficand even blog posts for comments on their new
products to measure the reaction of customers.

For all I know this
post has been captured in their research on their customers.

I await lorries of Cadbury Dairy Milk Chocolate to come my
way but I shall not hold my breath.

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About Me

I have been a training consultant for 30 years.
I also research Buyers Views of Sales people for an ongoing research study I have done for the last twelve years
The majority of photographs, videos and audios in this blog are taken on my new Fujifilm Fine pix T from May 2012 The Pencil Sketches are mine also